Designing A Korean Welfare State Model: Environment challenges of welfare states and the feasibility of alternative welfare programs

Abstract

This study aims to examine the characteristics of the Korean welfare state and to identify ways to restructure the current system and establish alternative welfare programs in response to emerging social challenges. To do this, internal and external environment challenges of Korea and traits of the Korea welfare state formation were analyzed. Furthermore, the effect of the upcoming 4th industrial revolution is discussed. In this vein, current welfare programs for working class and family and income security for old-aged are reevaluated. In addition, the feasibility of the asset-based policy, social economy, sharing economy and basic income as alternative welfare programs are investigated. Contrary to the Western welfare states, Korea has developed through the heavy chemicals industry, the direct financial support and the investment in social overhead capital (SOC), leaving the domestic economy to the family themselves and the market. The 1997 financial crisis shows a turnover from economic crisis to social crisis due to the developmental mode of regulation of the least interventionism in family policy. The 4th industrial revolution and the rapid population ageing accelerate the discussion on the revolution in the current welfare state. The working class, susceptible to the high portion of self-employed, worsened dual labour market and increase in crowd workers under the new gig economy, reveals the limitation of the current social insurance scheme, which was the main pillar of the modern welfare states. This leads to the need for establishing a Korean ‘flexicurity’ model and the systematization of social allowances loosely connected to personal labour experiences. For family policies acquired by the rapid quantitative growth over a qualitative unripeness, various benefits should be reorganized under the principles of universality, benefit adequacy, gender effectiveness, compatibility and priority between programs, reestablishing the value of the family care in policy. As multi-pillar Income security for old age is evaluated as insufficient, it is required to reform the system by increasing benefits and universalizing the beneficiaries of the Basic pension, increasing income replacement rate and the taxable income ceiling in the National pension and introducing a targeted assistance for the elderly maintaining themselves only with the Basic pension as income sources. Asset-based policy, social economy, sharing economy and basic income have taken place of alternative welfare schemes against the limitations of current welfare states. These, however, are double-edged swords: It is possible not only that the limitations of current welfare states could be complemented or be replaced but also that the existing welfare schemes might be eroded. It is time for a precise plan for all possible futures of alternatives to the current welfare states.